BILL ANALYSIS Ó
AB 574
Page 1
Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 574 (Lowenthal) - As Amended: April 15, 2013
SUBJECT : California Global Warming Solutions Act of 2006:
Greenhouse Gas Reduction Fund: sustainable communities
strategies
SUMMARY : Creates the Sustainable Communities Infrastructure
Program to fund sustainable communities strategies (SCSs) and
equivalent greenhouse gas (GHG) reducing strategies using
cap-and-trade auction revenues.
EXISTING LAW :
1)Requires ARB, pursuant to California Global Warming Solutions
Act of 2006 (AB 32), to adopt a statewide GHG emissions limit
equivalent to 1990 levels by 2020 and adopt regulations to
achieve maximum technologically feasible and cost-effective
GHG emission reductions.
2)Authorizes ARB to permit the use of market-based compliance
mechanisms to comply with GHG reduction regulations, under
limited circumstances once specified conditions are met.
3)Establishes the GHG Reduction Fund and requires all moneys,
except for fines and penalties, collected by ARB from the
auction or sale of allowances pursuant to a market-based
compliance mechanism (i.e., the cap-and-trade program adopted
by ARB under AB 32) to be deposited in the Fund and available
for appropriation by the Legislature.
4)Establishes the GHG Reduction Fund Investment Plan and
Communities Revitalization Act (AB 1532) to set procedures for
the investment of GHG allowance auction revenues. AB 1532
authorizes a range of GHG reduction investments, including
funding to reduce GHG emissions through strategic planning and
development of sustainable infrastructure projects, including,
but not limited to, transportation and housing.
5)Authorizes the Department of Finance to allocate or otherwise
use an amount of at least $500 million from moneys deposited
in the GHG Reduction Fund, and make commensurate reductions to
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General Fund expenditure authority, to support the regulatory
purposes of AB 32. Prohibits the use of funds for the purpose
of developing a high-speed rail system for at least two years.
6)Requires metropolitan planning organizations (MPOs) to include
a sustainable communities strategy (SCS), as defined, in their
regional transportation plans, or an alternative planning
strategy (APS), for the purpose of reducing GHG emissions,
aligns planning for transportation and housing, and creates
specified incentives for the implementation of the strategies
[SB 375 (Steinberg), Chapter 728, Statutes of 2008].
THIS BILL :
1)Makes legislative findings and declarations regarding the
transportation sector being the largest source of GHG
emissions in California and the need to fund integrated
transportation and public infrastructure investments with
changes in land use if the state is going to meet its GHG
emission reduction goals.
2)Directs the appropriation of funds from the GHG Reduction Fund
for projects that do all of the following:
a) Provide cost-effective and feasible reductions in GHG
emissions;
b) Combine transportation investments with local land use
modifications and other local policy changes to provide GHG
emissions reductions and, where feasible, to achieve other
public benefits, as identified;
c) Implement either an approved SCS or APS within existing
urbanized or developed areas in regions with a MPO. For
regions that do not have an MPO, projects must reduce GHG
emissions consistent with the regional transportation plan
or other regional plan;
d) Meet specified criteria that govern the newly created
Sustainable Communities Infrastructure Program; and,
e) Comply with existing requirements to benefit
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economically disadvantaged communities.
3)Provides that projects are to be selected through a
competitive process based on cost-effective GHG emissions
reductions using criteria established by ARB.
4)Directs the California Transportation Commission (CTC), in
consultation with the ARB, to designate a regional granting
authority to administer, as prescribed, the Sustainable
Communities Infrastructure Program within each region.
5)Requires that the regional granting authority to be the same
agency responsible for preparing the regional transportation
plan.
6)Provides that money in the Sustainable Communities
Infrastructure Program should be allocated to regional
granting authorities on a per capita basis.
7)Vests the Business, Transportation and Housing Agency, in
consultation with CTC and the High-Speed Rail Authority, with
responsibility for allocating moneys for areas of the state
not included by an MPO.
8)Directs ARB, in consultation with CTC and the Strategic Growth
Council (SGC), to establish criteria for the development and
implementation of regional grant programs that do the
following:
a) Require projects to be selected through a competitive
public process based on GHG emissions reductions;
b) Provide criteria for evaluating long-term GHG impacts;
c) Establish methods for evaluating, monitoring, and
verifying project effectiveness, as prescribed;
d) Encourage flexibility, collaboration, and innovation at
the local level to address local transportation and
community needs;
e) Provide for the development and implementation of
projects that integrate infrastructure investment with land
use to achieve the maximum GHG emissions reductions.
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f) Provide for public participation in the review of
proposed projects.
g) Provide for consultation and coordination with air
pollution control and air quality management districts.
9)Directs ARB, in consultation with SGC and MPOs, to establish
standards for integrated modeling systems and measurement
methods to ensure consistency in evaluating the potential
effectiveness of projects and verifying actual benefits
realized when projects are completed.
10) Requires ARB annually to review the program's
implementation and revise the program as needed.
11) Directs ARB, in consultation with CTC and SGC, to establish
standards for the use of program funds to ensure compliance
with prescribed criteria.
12) Delineates the following eligible uses of program funds:
a) Transportation network and demand management, including,
but not limited to, trip-reduction programs, congestion
pricing, and roadway modifications, such as roundabouts;
b) Public transportation, including operations,
maintenance, and capital costs;
c) Road and bridge maintenance; operations and retrofits
for complete streets, bike, and pedestrian safety
enhancements; safe routes to schools; and urban greening;
d) Clean transportation fueling infrastructure and support;
e) Multimodal network connectivity to reduce travel
distances and improve access to parks, schools, jobs,
housing, and markets for rural and urban communities,
including neighborhood scale planning;
f) Development and adoption of local plans and land use
policies that help to implement regional plans;
g) Community infrastructure, including public works and
municipal improvements necessary to support
transit-oriented development, affordable housing, infill in
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existing urbanized areas, and small walkable communities in
rural neighborhoods;
h) Multiuse facilities and accommodations for bicyclists,
pedestrians, and neighborhood electric vehicles;
i) Interregional rail modernization and related community
infrastructure; and,
j) Administrative costs and development and use of
evaluation, monitoring, and verification systems.
13) Authorizes ARB, in consultation with CTC, to identify
additional eligible uses of the funds that provide GHG
emission reductions.
14) Specifies legislative intent that all cap-and-trade
revenues are to be appropriated consistent with AB 32, AB 1532
and other related provisions of existing law.
15) Makes ARB's work to develop standards and guidelines and
the provision of grant money contingent on the Legislature
appropriating funds for these purposes.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. According to ARB, a total reduction of 80 million
metric tons (MMT), or 16 percent compared to business as
usual, is necessary to achieve the 2020 limit. Approximately
78 percent of the reductions will be achieved through
identified direct regulations. ARB proposes to achieve the
balance of reductions necessary to meet the 2020 limit
(approximately 18 MMT) through a cap-and-trade program that
covers an estimated 600 entities. The first two quarterly
auctions of allowances in the cap-and-trade program were held
in November 2012 and February 2013. The next auction (the
last of the current fiscal year) is scheduled for May 16,
2013.
The 2012-13 Budget Act (AB 1464) authorized Department of
Finance (DOF) to allocate at least $500 million from
cap-and-trade auction revenue, and make commensurate
reductions to General Fund expenditure authority, to support
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the regulatory purposes of AB 32. AB 1464 specifically
prohibits the use of auction funds for the purpose of
developing a high-speed rail system for at least two years.
AB 1532 (John A. Pérez) establishes a long-term spending
strategy for moneys in the Fund, including procedures for
deposit and expenditure of cap-and-trade auction revenues
pursuant to an investment plan. AB 1532 specifically
authorizes funding for strategic planning and development of
sustainable infrastructure projects, including, but not
limited to, transportation and housing.
Pursuant to AB 1532, DOF and ARB are developing a three-year
investment plan for the auction proceeds. The investment plan
will identify the state's GHG emission reduction goals and
priority programs for investment of proceeds to support
achievement of those goals. The Governor's proposed 2013-14
Budget includes a brief discussion of Administration
priorities for investment, emphasizing investments in the
transportation and energy sectors from which large reductions
in GHG emissions are possible. In addition, areas to be
examined during the planning process include sustainable
agriculture practices (including the development of
bioenergy), forest management and urban forestry, and the
diversion of organic waste to bioenergy and composting.
In February 2013, ARB released an investment plan "concept
paper" and held public workshops to solicit public input. A
draft investment plan will be considered by ARB on April 25,
2013. DOF will submit the final plan to the Legislature in
May 2013. Funding will be appropriated to state agencies by
the Legislature and Governor through the annual Budget Act,
consistent with the plan.
2)AB 574 establishes the Sustainable Communities Investment
Program to fund implementation of SCSs using cap-and-trade
auction proceeds. According to the author, the program is
designed to implement GHG reducing plans in the most cost
effective way while encouraging innovation, collaboration, and
flexibility.
The author asserts that a key method to reduce transportation
emissions is the development of SCSs and other regional plans
but notes that local governments tasked with implementing
these strategies lack sufficient funds. The author contends
that, by funding investments that integrate transportation and
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other public infrastructure investments with changes in land
use, the state can achieve significantly greater greenhouse
emission reductions than single purpose investment strategies.
The author cites several key aspects of the proposed program:
a) Every region of the state receives its per capita
share of sustainable communities funding.
b) The locally administered competitive grant program
will incentivize local land use strategies to be
integrated with a full range of transportation
investments to achieve the highest greenhouse emission
reductions, advance SCS objectives, and result in the
greatest number of public co-benefits (such as housing,
air quality, health, etc.).
c) The program features a performance-based approach to
maximize regional flexibility but includes modeling and
verification systems approved by ARB to ensure the
program's consistency and effectiveness.
REGISTERED SUPPORT / OPPOSITION :
Support
California Alliance for Jobs
California Association of Councils of Governments
California Center for Sustainable Energy
California State Association of Counties
California Transit Association
California Transportation Commission
Capitol Corridor Joint Powers Authority
City of San Luis Obispo
Cobblestone Placemaking
County of Del Norte
County of Napa
Environmental Defense Fund
Foothill Transit
Glendale City Employees Association
League of California Cities
Livermore Amador Valley Transit Authority
Marin County Board of Supervisors
Metropolitan Transportation Commission
Monterey-Salinas Transit
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Natural Resources Defense Council
Organization of SMUD Employees
Peninsula Corridor Joint Powers Board
Riverside Transit Agency
Sacramento Area Council of Governments
Sacramento Metropolitan Air Quality Management District
San Bernardino Public Employees Association
San Diego Association of Governments
San Luis Obispo County Employees Association
San Mateo County Transit District
San Mateo County Transportation Authority
Santa Clara County Board of Supervisors
Santa Clara Valley Transportation Authority
Santa Rosa City Employees Association
Self-Help Counties Coalition
Sonoma County Transportation Authority
Southern California Association of Governments
The Met Sacramento High School
Transportation Coalition for Livable Communities
Urban Counties Caucus
Victor Valley Transit Authority
Opposition
California Chamber of Commerce
California League of Food Processors
California Manufacturers and Technology Association
California Taxpayers Association
Western States of Petroleum Association
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092